Homebuyers are more price-sensitive and are agreeing sales below a property’s asking price, data has revealed.
The typical price reduction is up from 3.2% during the summer, according to Zoopla.
The property website said the reductions come amid a recent drift towards higher mortgage costs for borrowers.
Buyers are also considering increased uncertainty regarding the economy, and the impact of the Budget on the jobs market.
Buyers were more confident in July when typical mortgage rates were lower, Zoopla said.
House price growth
The size of the gap between asking prices and agreed purchase prices is a leading indicator of house price growth.
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The gap between the asking and agreed sales prices peaked at 4.6% in late 2023, resulting in modest price falls.
Meanwhile, during the pandemic in 2021, buyers had to pay the asking price to secure a sale.
A buyer’s market
Zoopla said it remains a buyer’s market and that signs of increased caution among homebuyers will keep price growth in check next year.
Zoopla expects values to increase by 2.5% in 2025, with an ongoing North/South divide resulting in lower house price growth in Southern England and higher growth in other regions.
This is due to the relative affordability of housing across the country and how much house prices have risen relative to household incomes.
House prices in London have risen by 83% since 2010, followed by 70% across Southern regions of England, 66% across the Midlands and 56% in Wales.
At the other end of the spectrum, average house prices are just 19% higher in Northern Ireland, 30% higher in Scotland and 41% higher in Northern regions of England, providing room for house price growth.
More homes for sale have boosted choice, and sales have grown year-on-year.
The last four weeks have seen sales agreed 23% up on last year as buyers try to agree deals ahead of the stamp duty changes from April 2025.
There are 283,000 sales agreed working their way through to completion in the first half of 2025, according to Zoopla’s data.
It is the largest sales pipeline in four years, worth £104bn – up 30% compared to this time last year.
More sales have also helped house prices return to growth in 2024.
Annual house price growth was 1.9% in the 12 months to November 2024, compared to a drop of 1.2% a year ago.
The average UK house price stands at £267,500, Zoopla said.
House price growth ranges from 0.7% in the South East to 6.8% in Northern Ireland and 3.5% in the North West region.
Housing market predictions for 2025
The outlook for the housing market in 2025 will be dictated by the strength of the economy and employment market, along with the trajectory for mortgage rates, all set within the context of the relative affordability of homes across the UK, according to Zoopla.
The firm expects mortgage rates to remain at current levels and buyers to remain price-sensitive.
It forecast a 2.5% increase in house prices over 2025 and 1.15 million housing sales, up from 1.1 million in 2024.
Richard Donnell, executive director of Zoopla, said: “Buyers and sellers returned to the housing market in 2024, having delayed moves in the face of higher mortgage rates.
“There is a sizeable pipeline of sales that will complete in the first half of 2025, with many hoping to avoid higher stamp duty costs from next April.
“More sales have supported a return to house price growth across the country, but homebuyers have become more price-sensitive in recent weeks as mortgage rates drift higher.
“Affordability constraints will keep the pace of house price growth in check over 2025, but there will be enough price inflation to support 5% more home moves.”
Malcolm Prescott, managing director of Devon estate agent Webbers, said: “Zoopla reveals a 1.9% year-on-year growth, and here in the South West, we can report that individual homes have performed a little better.
“All of this is supported by rising salaries (4% up in real terms on average) and the current competitive mortgage rates, which we see continuing. This resilience underscores the long-standing strength of the UK housing market.
“Additionally, buyers now have greater choice, with many estate agents, including ourselves here in the West Country, reporting a 30% increase in available stock compared to last year. This gives prospective buyers a better chance of finding their dream home.”
Meanwhile, Nathan Emerson, chief executive of Propertymark, said: “When you compare how the housing market entered 2024 to where we stand as we head into 2025, it’s an incredible journey that has seen consumer confidence and affordability grow consistently across the entire year.
“While there may still be aspects of the wider economy that need to find greater stability overall, the housing market sits in a strong position to deliver growth.
“We are expecting to see a busier-than-normal first quarter, especially across England and Northern Ireland, as people look to complete on their purchases before the proposed stamp duty thresholds change in April.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Buyers are more price-sensitive and agreeing sales at 3.6% below asking price, Zoopla reveals
